Aker BP keeping Odfjell Drilling rig busy until end of 2026

Offshore drilling player Odfjell Drilling has inked an amendment with Aker BP which enables the extension of the firm contract for a semi-submersible drilling rig hired for work on the Norwegian Continental Shelf (NCS).

Odfjell Drilling was one of the three offshore drilling contractors that entered into drilling and wells alliance agreements in January 2023 with Aker BP to carry out drilling activities on the Norwegian Continental Shelf. Thanks to this, the Deepsea Nordkapp rig was contracted to the end of 2024 with an option to extend the contract further.

With the new amendment in place, the extended term will now start on January 1, 2025, in direct continuation of the current firm contract period and run for a fixed duration of two years, which will be compensated on a market-based rate mechanism. The contract value for 2025 has a floor and ceiling day rate, resulting in a contract value of $124 million to $146 million, where the ceiling of the day rate range will be adjusted annually based on an inflation formula.

On the other hand, the contract value for 2026 is approximately $179 million which will also be adjusted annually based on an inflation formula. Aside from the market-based day rates, Aker BP will pay performance and fuel savings incentive bonuses. This contract extension is subject to license partner approval while the rig contract now entails rolling one-year un-priced optional periods, the price of which will be based on market rates set in advance of each respective optional year.

Kjetil Gjersdal, Chief Executive Officer of Odfjell Drilling, commented: “We are pleased to be extending our contract with Aker BP, with whom the Deepsea Nordkapp has been working with since its delivery in 2019. Together with our Alliance model and its focus on collaboration and innovation, we foresee Odfjell Drilling and Aker BP continuing to set new performance benchmarks and provide safe and efficient operations with the Deepsea Nordkapp for many years to come.

“With this extension, our owned fleet is further secured with firm backlog from 2024 and beyond at increasing day rates. In addition, the rolling optionality mechanism will continue to give opportunity to further extend this backlog at market rates.”

The 2019-built Deepsea Nordkapp, former Stena Midmax, semi-submersible drilling rig, which Odfjell Drilling bought from Samsung Heavy in April 2018, is a sixth-generation dynamically positioned harsh environment and winterized semi-submersible of a Moss-enhanced CS 60E design.

This extension with Aker BP comes a month after Odfjell Drilling secured another one with Equinor to drill additional wells on the Norwegian Continental Shelf.